Mumbai, August 22 - Max Hypermarkets India Private Ltd has signed a licence agreement with Dutch food retailer SPAR International for hypermarkets and supermarkets in India, the latest global brand to enter the fast-growing retail market.
Max will invest 2 billion rupees ($50 million) in seven SPAR-branded hypermarkets and supermarkets in cities over two years, the companies said in a statement.
The first hypermarket, measuring 85,000 sq ft, and the first supermarket, at 28,000 sq ft, would open in Bangalore next month.
"Developing SPAR hypermarkets in India is a key element in our strategic plan," Gordon Campbell, managing director of Spar International, said in the statement.
"India is a market with enormous potential," he said.
India's retail industry, valued at nearly $350 billion, is forecast to double in size by 2015, with modern retail's share also set to increase from about 3 percent now.
"We studied the Indian market for more than two years for food and grocery formats, and felt the timing was right," Viney Singh, managing director of Max Hypermarkets India, told Reuters.
The company had discussions with other global retailers, Singh said, but declined to identify them. Local media have reported that France's Carrefour was in talks with Landmark.
Foreign multiple-brand retailers are limited to wholesale and franchise operations, while single-brand retailers can take up to 51 percent in a venture with a local partner.
Max Hypermarkets is owned by a non-resident Indian, Micky Jagtiani, who also controls Dubai-based Landmark Group, which opened its first department store in India, Lifestyle, in 1999.
The SPAR stores will compete with Germany's Metro , India's Reliance Industries Ltd, the RPG Group, the Tata group's Trent Ltd, as well as Pantaloon Retail India and Shopper's Stop Ltd .
Wal-Mart Stores Inc, the world's biggest retailer, recently signed a joint venture agreement for wholesale stores with India's Bharti Enterprises, and the venture expects to open 10 to 15 centres in seven years. Reliance expects to open more than 30 hypermarkets this year and about 500 by the end of 2010.
Landmark Group currently operates more than 60 retail stores in India, and also plans to launch a chain of budget hotels. It expects revenues of $1 billion dollars from 300 stores in India by 2010, it said. ($1=41 rupees)